Report: 25% Virginia Businesses are Closed Temporarily or Permanently

Date: December 02, 2020

NFIB's State Director Weighs in at VA Small Business Commission Meeting

During the Virginia Small Business Commission’s meeting on December 1st, Sean Brazier, Vice President of Economic Competitiveness at the Virginia Economic Development Partnership (VEDP) presented on the impact of COVID-19 on small businesses and the efficacy of Paycheck Protection Program loans delivered in Virginia.

According to Mr. Brazier, nearly a 25 percent of businesses in Virginia have closed temporarily or permanently due to impacts from the pandemic.

Both federal and statewide programs attempted to get relief money into the hands of business owners. PPP is probably the best-known of these programs, and Brazier said it provided more than 60% of Virginia businesses with loans. 93,000 businesses with employees (excluding sole proprietorships) received loans through PPP. The median loan amount was $123,000.  Businesses with 20-99 employees were most likely to receive loans, Brazier said.

Businesses in rural areas faced more challenges in accessing loans, he explained. In densely populated areas, between 50-75% of businesses participated in the program. In less populated areas, that percentage dropped to between 25-50%. Brazier said this disparity is likely due to the fact that there are fewer banks in rural areas and that rural small businesses are less likely to have relationships with lenders.

Near the end of the meeting, commission members discussed potential legislative priorities for the coming year. National Federation of Independent Businesses (NFIB) Virginia State Director Nicole Riley offered several suggestions during the public comment period.

Riley encouraged Virginia legislators to conform to federal tax policy regarding PPP loans. Money received through PPP loans will not count as income, Congress decided earlier this year. She also said that keeping payroll taxes low and enhancing statewide grant programs could help keep Virginia’s small businesses afloat.

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